Survey Shows 45% of Seniors Don’t Know If or When They’ll Fall into the Medicare Coverage Gap

We surveyed 501 adults age 65+ to find out how well they understood the coverage gap, what they think would happen to their spending in the gap and whether they were financially prepared.

The Medicare coverage gap (also known as the “donut hole”) was created in 2003 as part of the Medicare Modernization Act, and has been evolving ever since — with big changes coming in 2019 and 2020 to “close” the gap. (Medicare’s website has a clear, detailed description of what the coverage gap is and how it’s changing.)

These changes will impact the out-of-pocket spending for Medicare beneficiaries who reach the coverage gap. Depending on their plan design and their drug regimen, beneficiaries might have to pay more during their time in the gap and, if the out-of-pocket spending threshold to get out of the gap increases as predicted, they might spend longer in it.

With prescription drug use high among the senior population, we wanted to know: are seniors prepared? Do they understand what the coverage gap is, if and when they’ll fall into it, and what will happen if they do? And, of increasing importance, do they know if and where they can get help saving money on their prescriptions?

So we surveyed 501 people* age 65 and up on their understanding and perceptions of the coverage gap.

Here’s what we learned.

Do our survey respondents understand the coverage gap? Well… kind of.

The majority of our group (55%) said they were confident about if and when they would fall into the coverage gap. This indicates an understanding of what the gap is; however, when asked to explain the coverage gap in their own words, almost 27% said they didn’t know, while many other written answers suggested vague or inaccurate understandings.

When it came to understanding what the coverage gap could mean to them financially, only about 5% associated the coverage gap with higher costs, and 31% reported the belief that patients had no coverage or payment assistance at all while in the gap.

Further, when asked to explain, in their own words, what they knew about the upcoming 2019 and 2020 changes, 77% indicated they couldn’t explain the changes. Two percent suggested the gap would be expanding, and only 6% correctly made mention of the gap shrinking or being eliminated.

Are they prepared to possibly pay more if and when they fall in the coverage gap? Many probably are. But too many might not be.

It’s concerning that 45% of our respondents reported not knowing if or when they’d enter the coverage gap. If beneficiaries aren’t able to anticipate if or when a shift in coverage could change their spending, how can they financially prepare for it?

At the time of our survey (October 2018), our respondents were enjoying relatively good drug coverage: 75% of respondents said they pay less than $50 out of pocket per month on prescription meds (42% overall said they spend less than $10/month).

When asked what they thought would happen to their out-of-pocket spending if and when they fell into the gap, 38% said they expect to pay the same amount or less for medications. Whether or not that’s true for them (it would vary depending on their coverage and their medications), their responses indicate that over a third of our group may not be planning ahead of time to adjust their budget to meet these increased costs.

Further, with the out-of-pocket spending threshold for leaving the coverage gap predicted to increase, it may take some seniors longer to spend their way out of the gap and into catastrophic coverage, where their cost-sharing burden decreases significantly. This would be particularly troublesome for those living on a fixed income.

Do our respondents “shop around” for the best prices on their medications? Some do, but most don’t — and many might be missing out on savings opportunities.

Like much of the population, lack of price transparency on prescription drugs keeps many seniors in the dark about how to save money on their medications. Of the seniors we surveyed, 59% said they never compare prescription drug prices before they purchase them. Twenty-four percent said they don’t compare prices because they don’t think it’s possible. And while just over half (51%) of our group said they “always” or “sometimes” ask their doctors to prescribe a specific drug due to price, 35% said they never do because they don’t know the prices. This is understandable, as drug prices are often not readily available to consumers, and a given drug could cost one of several different prices, depending on the patient’s coverage.

Finally, when asked if Americans could easily access help in paying for prescription drugs, 65% said no, and 3% said they didn’t know. That gives us 68% of our Medicare-aged survey group — a group particularly susceptible to rising prescription drug costs — who may not seek out money-saving opportunities because they aren’t aware they exist.

How can people save money on their medications before, and while in, the coverage gap? Blink Health.

Whether you have Medicare coverage, coverage through an employer or the marketplace, or no coverage at all, you might be able to pay less for your prescriptions through Blink Health. While anyone can benefit from these lower prices, Blink could be especially helpful to Medicare beneficiaries who find themselves facing higher costs in the coverage gap.

*About 27% of our survey population reported not being covered by Medicare. Our assumption is that the remaining 73% are. As we surveyed this age group’s understanding and perceptions of the coverage gap — as opposed to their experience with it — we used all 501 complete responses.

Savings based on comparisons between Blink Health prices and retail prices without Rx coverage. Blink Health is not insurance. The discount prescription drug provider is Blink Health Administration, LLC, 233 Spring Street, 8th Floor East, New York, NY 10013, (844) 366–2211, www.blinkhealth.com